3 Travel Stocks to Buy Now: Q2 Edition

Josh Enomoto

Sun, Apr 21, 2024, 1:04 PM 4 min read

According to a Deloitte report, we may be moving into a new era of travel prioritization. Per Hotel Dive’s summary of the analysis, “The report found that travelers are most likely to splurge on in-destination experiences, lodging location and destination distance.” So, the desire to explore hasn’t diminished. Rather, certain preferences may have shifted.

Plus, expenditure data shows that people are still opening their wallets. That being the case, it’s a great time to consider travel stocks to buy now.

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Hilton (HLT)

Source: josefkubes / Shutterstock.com

One of the biggest brands in the lodging industry, Hilton (NYSE:HLT) engages in managing, franchising, owning and leasing hotels and resorts. It operates through two segments: Management and Franchise, along with Ownership. Fundamentally, HLT stock faces stiff competition from the sharing economy, namely Airbnb (NASDAQ:ABNB). Nevertheless, Airbnb may be losing its luster.

Increasingly, I’ve been reading up on some horror stories about the company and its users’ experiences. Granted, this is not the majority experience. However, it’s worth noting that the company has a hold consensus among analysts. Also, its average price target of $147.07 implies an 8% downside risk.

On the other hand, experts rate HLT stock a consensus moderate buy with a $213.91 price target. That implies about 8% upside potential. However, the high-side estimate calls for a price per share of $254.

Analysts are also looking at revenue to reach $11.24 billion, up 9.8% from last year’s haul of $10.23 billion. Overall, it could be an intriguing idea for travel stocks to buy now.

United Airlines (UAL)

Source: frank_peters / Shutterstock.com

As one of the top-tier names in the airline industry, United Airlines (NASDAQ:UAL) could be a huge beneficiary if travel sentiment truly picks up. What’s intriguing about UAL stock is that the share price is heavily discounted relative to its pre-pandemic levels. Therefore, if the aforementioned prioritization occurs, United could enjoy a significant upside pathway.

One aspect to consider is the company’s strong financial performance. In the trailing four quarters, the average surprise came out to 31.45%. Further, UAL recently popped higher on the underlying company’s strong earnings forecast. Even with the boost, analysts’ average price target of $58.27 implies upside potential of over 13%. Further, the high-side target reaches an ambitious $75.

For fiscal 2024, experts anticipate revenue of $57.39 billion. That’s up 6.8% from last year’s print of $53.72 billion. Also, the most optimistic target calls for sales of $58.33 billion. In the following year, the top line could rise to $60.27 billion. Thus, it makes a reasonable case for travel stocks to buy now.

Uber (UBER)

Uber sign on its headquarters building in San Francisco, California, USA - June 6, 2023. Uber Technologies is a transportation conglomerate.

Source: JHVEPhoto / Shutterstock.com

As the company that launched the ride-sharing concept (and the concept of the sharing economy), Uber (NYSE:UBER) is a powerhouse among travel stocks to buy now. What makes it compelling is that it’s attacking the broader value chain. Yes, the core business will center on ride sharing. However, it’s making big inroads into food deliveries and even shipping.

Regarding the ride-sharing unit, Uber presents two main avenues for growth. First, the service caters to everyday mobility needs. Second, when going abroad to places where English isn’t the main language, the underlying app is a lifesaver. Basically, the traveler and the driver conduct business via the app, not with each other. So, there are less likely to be problems (i.e. scams).

Notably, analysts are quite bullish on UBER stock, forecasting EPS of $1.28 for the current fiscal year. That’s up from last year’s result of 82 cents. On the top line, they’re projecting sales of $40.79 billion or a growth rate of 16.2%. The next year, revenue could fly to $47.47 billion. For speculators, UBER is one of the travel stocks to buy now.

On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.